Civil Contractor PF Registration

Hi, I am a civil contractor, and I give contracts to my subcontractors to build buildings, shops, etc. They bring labor (on a temporary basis) and complete the work with them. How should I register for PF and ESI if I have only 4-5 permanent workers? Please guide me.

Thank you, Mrugen,

I would like to elaborate on the question. If he hires labor on a seasonal basis (without any confirmed employees on the payroll), how can he register for PF and ESIC in this situation?

Regards,
Chetan

I thought the minimum number for ESIC was 20. Cheetan, please read the relevant acts.

There are rules defining seasonal industry (construction does not generally come under it). Even for seasonal industry, PF and ESIC apply. If you are working with corporate clients, they will insist on PF payment for all workers, irrespective of size. So you will have to get a PF number for the subcontractor or pay under your code.

In case ESIC does not apply to your area, please get a workman accident insurance cover. Else, in case of an accident, your liability may be crippling.

Dear Mrugen ji,

ESI is applicable when you have 10 or more employees (not 8) regardless of their employment status (permanent, temporary, casual, part-time, contractual, or as a contract employee) and irrespective of salary limits. This rule does not apply in Maharashtra, Himachal Pradesh, and Assam.

In Maharashtra, Himachal Pradesh, and Assam, ESI is applicable in factories when you have 10 or more coverable employees and in shops and commercial establishments when you have 20 or more coverable employees. Employees include those of contractors as well.

Dear Chetan ji,

You are a civil contractor. You undertake civil work under contract and execute it through sub-contract. You have 4-5 permanent employees.

How many temporary/casual employees you have is not written by you. How many employees your subcontractor brings is also not written by you.

Your question is, how to register your establishment under PF and ESI?

My answer to your above question is as under:

As regards to PF: PF Act is not applicable to your establishment if you have fewer than 20 employees, whether permanent or temporary or casual altogether, including subcontractors. However, if you are undertaking contract work for developers/builders who are covered under the PF Act, then you need to cover your employees, including subcontractors, under PF.

In this case, you have the following options:

1. To cover your employees, including your subcontractors, under the PF code of the developer/builder; or

2. To get your establishment registered under PF voluntarily; or

3. To get your establishment registered under PF upon having 20 employees on the payroll, including subcontractors.

As regards to ESI: ESI Act is not applicable to your establishment since you are in civil construction and have all construction workers. (Also, you are in Pune and have less than 20 employees).

However, if you are undertaking contract work for developers/builders of covered premises, then it is the duty of the developer/builder to cover your/subcontractors' employees under the ESI code allotted to him.

If your developer/builder is not agreeing to cover your employees under the ESI code allotted to him and insists that you should have your own code as a pre-qualification to get contract work, you have no option....